For years, cable companies have been asking Hollywood to let them sell movies on demand the same day a film’s DVD goes on sale. No dice. So how did Apple, which is expected to announce so-called “day and date” rentals and downloads tomorrow at MacWorld, make it happen? UPDATE: Rich Greenfield says he was wrong – “day and date” not happening.
Pali Research’s Rich Greenfield has a smart take (reg required): Hollywood was willing to work with Steve Jobs, he argues, because it doesn’t see him as a threat to its existing DVD business — its most important revenue stream.
• New DVDs with iTunes-compatible digital files embedded on the discs will help boost DVD sales at a time when they’re declining.
2) The studios don’t think iTunes sales or downloads will cut into DVD rentals, but that cable video-on-demand would:
In a sense, the studios could be looking at iTunes rentals as an incremental “portable” or out-of-home
rental window, rather than a replacement for the Blockbuster and Netflix DVD rental business.
It’s certainly a calculated risk on the part of the studios, who are well aware of what happened to the music business when it cut a deal with Jobs in 2003: Apple ended up with a lock on the digital music business. But as we’ve noted before, Hollywood is in a much stronger position in 2008 than the music business was 5 years ago. It will be interesting to see if that’s allowed them to cut a smarter deal.
What will Steve Jobs unveil at MacWorld? There’s still time to place your bets at the SAI MacWorld Predictions Game.
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